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Jul, 03 2015

Facilitating finances for the fairer sex

Are you short of funds and looking at various alternatives to run your business successfully? Via this write up, we'll help women entrepreneurs and franchisees to easily walk through the process for acquiring funds via external funding options that are av

A Karnataka-centric 2014 report titled ‘Strengthening Her Enterprise’ states over 90% women entrepreneurs have to rely on personal funding. Nearly 68% women entrepreneurs surveyed felt they had to put in more efforts to get bank loans.

Some of the notable Govt. of India Schemes for women entrepreneurs are:

  • Schemes of Ministry of MSME
  • Schemes of Ministry of Women and Child Development
  • Financing Schemes by Banks/ Financial Institutions

Women today from almost all walks of life are increasingly oriented towards transforming their lives by pursuing their long cherished dream of entrepreneurship to empower themselves. Besides having a great business acumen and innovative business idea, like men, women too undergo various stumbling blocks. When it comes to starting one's own business, funding is the key challenge that womenpreneurs face today.  Let's take a glimpse at what all schemes and government support is accessible for womenpreneurs who are looking to start their business.

When it comes to franchising or setting one's own business, the franchisors are often confronted with a question of “How to raise funds for starting business”? Considering the plight of investors, TFW's special edition on womenpreneurs, takes a step ahead to enlighten them about the various funding options available and guide through a checklist which highlights about the homework needed before getting into business.  Experts from various organisations believe that one must have an adequate liquid capital to completely fund the business.

Government schemes for womenpreneurs

To fuel the country's growth trajectory, government is showing positive signs to foster entrepreneurship and empowering women. The Indian government has launched various schemes to fund the new businesses. Enlightening about the same, Deepak Daftari, Director & CEO, esiksha.com, DD Web Vision Pvt Ltd says: “In India, the Micro, Small & Medium Enterprises development organisations, various State Small Industries Development Corporations, the Nationalised banks and even NGOs are conducting various programmes including Entrepreneurship Development Programmes (EDPs) to cater to the needs of potential women entrepreneurs.” He further elaborates, “The office of DC (MSME) has also opened a Women Cell to provide coordination and assistance to women entrepreneurs facing specific problems. There are also several other schemes of the government at central and state level, which provide assistance for setting up training-cum-income generating activities for needy women to make them economically independent. Small Industries Development Bank of India (SIDBI) has also been implementing special schemes for women entrepreneurs.”

In addition to the special schemes for women entrepreneurs, various government schemes for MSMEs also provide certain special incentives and concessions for women entrepreneurs. For instance, under Prime Minister's Rozgar Yojana (PMRY), preference is given to women beneficiaries. The government has also made several relaxations for women to facilitate the participation of women beneficiaries in this scheme. 

On the other side, Rajat Tandon, Senior Director, NASSCOM 10,000 Startups informs: “In an effort to encourage women participation in the start-up ecosystem, the Government and various industry bodies like NASSCOM regularly come up with financial schemes and funding plans. For instance, nationalised banks offer loans at low interest rates and in some cases they even give relief to the applicant in terms of collateral security. Some banks also provide women applicants with guidance, training and assistance to showcase their products. To secure funding, women can approach these nationalised banks, apply to NASSCOM to be a part of their angel investing initiatives, or apply to Ministry of Micro, Small and Medium which has set up a special cell to assist women entrepreneurs.”

Moving further, he suggests, “Apart from banks, there are many women entrepreneur associations like FIWE, CWEI, SEWA, TiE Stree Shakti (TSS) and SAARC Chamber Women Entrepreneurship Council, which help women to set up their venture, secure funding and provide them with support during the initial stages.” In a bid to offer opportunity to women entrepreneurs and franchisees, Chennai-based Naturals Salon & Spa chain has also tied up with national banks to support its franchisees so that they are able to raise funds via external funding options. Commenting about how their brand supports its women franchisees, C.K. Kumaravel, CEO & Co-Founder, Naturals Salon & Spa, says: “Monetary constraints or fund raising can bog down any entrepreneur who wishes to move to the next level. Understanding this is critical and to support women who wish to be entrepreneurs, we have tie ups in place with Indian Overseas Bank and Bharat Mahila Bank. As a result of our tie ups, clients with extremely good credit rating can get up to 80% funding from the banks mentioned, with submission of necessary documents. Once this process is complete, the in-house business development team from Naturals will coordinate with the franchise partner for a smooth acquisition of funds.”

Word of advice for womenpreneurs

Women franchisees and entrepreneurs must do their homework well in terms of conducting research about the industry they are planning to make investments. Their business plan should be viable and scalable. They should be aware of their target customer. Their business model should be able to fetch revenues. Also based on the market trends and customer feeback, they should keep transforming their business model, product offerings and concept to grow faster and achieve returns on time.  Enlightening about doing their homework well prior franchisees think of acquiring funds from external sources, Deepak Daftari, says: “They should find out the right financial institution for funding requirement as different products, industries, segments will have different funding requirements and the right fit will add value to the business life cycle whereas a mismatched funding partner will be a disaster for the business to grow.”

Now, homemakers and enthusiastic womenpreneurs can easily acquire funds for starting their business venture as government loans and special schemes are available for women franchisees and entrepreneurs via which they can add wings to their long cherished entrepreneurial dreams. Go and grab the lucrative opportunity and make a mark in every industry.

Tips for women franchisees & womenpreneurs

= Get regular peer reviews for the product or service

= Innovation is the key to success

= Look at the bigger picture rather than short term material gains

= Have a thorough understanding of financial planning, revenues and how targets work before you start

= Ensure that you have enough time to devote towards development of your business

= Customer is the king so make sure that you offer the best

= Should either have volumes for small margin products or higher margins for a smaller segment product

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